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The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Iovance Biotherapeutics, Inc. (NASDAQ:IOVA).
Is IOVA a good stock to buy now? Investors who are in the know were in a pessimistic mood. The number of bullish hedge fund bets were cut by 3 lately. Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) was in 40 hedge funds' portfolios at the end of September. The all time high for this statistic is 43. Our calculations also showed that IOVA isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Joseph Edelman of Perceptive Advisors
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind let's take a gander at the key hedge fund action surrounding Iovance Biotherapeutics, Inc. (NASDAQ:IOVA).
Do Hedge Funds Think IOVA Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 40 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from one quarter earlier. On the other hand, there were a total of 31 hedge funds with a bullish position in IOVA a year ago. With hedge funds' sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
The largest stake in Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) was held by Perceptive Advisors, which reported holding $332 million worth of stock at the end of September. It was followed by Avoro Capital Advisors (venBio Select Advisor) with a $313.9 million position. Other investors bullish on the company included OrbiMed Advisors, Farallon Capital, and Great Point Partners. In terms of the portfolio weights assigned to each position Great Point Partners allocated the biggest weight to Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), around 11.48% of its 13F portfolio. Ghost Tree Capital is also relatively very bullish on the stock, earmarking 5.47 percent of its 13F equity portfolio to IOVA.
Due to the fact that Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) has witnessed declining sentiment from the smart money, it's easy to see that there exists a select few funds that decided to sell off their entire stakes in the third quarter. It's worth mentioning that Noam Gottesman's GLG Partners cut the biggest stake of all the hedgies monitored by Insider Monkey, valued at close to $6.5 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital was right behind this move, as the fund dumped about $2.9 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 3 funds in the third quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) but similarly valued. These stocks are Landstar System, Inc. (NASDAQ:LSTR), The Descartes Systems Group Inc (NASDAQ:DSGX), American Campus Communities, Inc. (NYSE:ACC), Sasol Limited (NYSE:SSL), Prosperity Bancshares, Inc. (NYSE:PB), Zions Bancorporation, National Association (NASDAQ:ZION), and Cenovus Energy Inc (NYSE:CVE). This group of stocks' market values are closest to IOVA's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LSTR,23,210116,0 DSGX,12,212088,2 ACC,21,349316,-5 SSL,5,31702,-5 PB,27,105441,0 ZION,24,97741,0 CVE,18,241953,-8 Average,18.6,178337,-2.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.6 hedge funds with bullish positions and the average amount invested in these stocks was $178 million. That figure was $1475 million in IOVA's case. Prosperity Bancshares, Inc. (NYSE:PB) is the most popular stock in this table. On the other hand Sasol Limited (NYSE:SSL) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) is more popular among hedge funds. Our overall hedge fund sentiment score for IOVA is 79.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks returned 30.7% in 2020 through December 14th but still managed to beat the market by 15.8 percentage points. Hedge funds were also right about betting on IOVA as the stock returned 52.7% since the end of September (through 12/14) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.